Spanish PM buoyant on future

Emma Rowley

THE worst of the euro crisis has passed as fears over the shared currency's future ease, according to Spain's Prime Minister.

''There are doubts about the irreversibility of the euro, it's true that there were more a few months ago than today,'' Mariano Rajoy told a news conference in Madrid. ''I'm totally and absolutely convinced that the worst has passed.''

Mr Rajoy, who was speaking a year after he came to power, is enacting spending cuts and tax increases to save €102 billion ($A125 billion) from the Spanish budget by 2014. Spain is, however, still expected to seek a sovereign bailout, having already received a rescue for its banking sector. Bad loans at Spanish banks reached a new record level in September, its central bank said on Monday. More than one in 10 loans were classed as being at a high risk of not being paid, totalling more than €182 billion.

Meanwhile, in an effort to reduce tax evasion, Spain has begun stopping consumers from paying bills of €2500 or more in cash. The ban applies when at least one party to a deal, or sale, acts in a professional or commercial capacity, such as when someone pays a tradesman.

In Italy, official figures showed industrial orders dropped 4 per cent in September against the month before, leaving them down 12.8 per cent annually. The decline marked the 13th annual drop in a row, and was blamed on faltering internal demand as the country reduces spending and the government imposes austerity.